Advantages and disadvantages of using Cryptocurrency

Cryptocurrency is a universal digital currency that is widely accepted. If you are a business or you render services, accepting or receiving payments from people can include using cryptocurrency as a payment method to widen your customer base. And if you are a consumer using FIAT currency, you can include cryptocurrency as a means of payment. In summary, if are buying or selling, many companies and customers use cryptocurrency. 

The most popular cryptocurrencies people and companies use include Bitcoin, Ethereum, and Litecoin. Meanwhile, using cryptocurrencies offers diverse advantages and disadvantages, which will be the focus of this write-up. Read more.

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Advantages of Using Cryptocurrency

The following are some of the advantages of using cryptocurrencies for businesses:

1. Simple Processing

Payments using cryptocurrency are very easy, simple, and quick because it requires only a smartphone or computer to transfer from one digital wallet to another.

2. Transparency

Every transaction made using cryptocurrency is recorded and can be viewed in a public list called the Blockchain. This makes tracing the history of a transaction possible and it prevents dubious people from spending other people’s coins or undoing transactions.

3. No Intermediaries

Using cryptocurrency blocks out intermediaries in the payment and receipt of coins. Blockchain does not allow intermediaries like banks and other third-party agencies.

4. Generally Accepted Payment Method

Cryptocurrency is gradually becoming a widely accepted payment method among businesses, organizations, and individuals in all sectors of the economy.

 

Disadvantages of Using Cryptocurrency

Here are some downsides of using cryptocurrency: 

1. The Risk of Losing Your Virtual Wallet

Because the majority of cryptocurrency coins are stored in virtual wallets, the risk of losing such wallets or deleting the currency is higher. Also, some people’s cryptocurrency has been reportedly stolen from websites that allow remote storage of cryptocurrency.

2. High Volatility

The value of cryptocurrencies is difficult to predict due to their high volatility. Their value can change suddenly and significantly. As a result, many people are not comfortable with converting real money into cryptocurrency.

3. Lack of Regulation

The cryptocurrency market is not regulated by the government or any financial regulatory body. As a result, there is no protection for any business or individual using cryptocurrency.

4. Threat of Negative Government Legislation

If the government makes legislation banning the use of cryptocurrency in the country, there will be limitations to its use in the local economy.

5. Cyber Attacks

If cryptocurrency exchanges are attacked by cyber criminals and hackers, the chances of losing everything are high, and the loss will be irreparable. 

Final Words

Above are the advantages and disadvantages of using cryptocurrency. If you intend to use cryptocurrency, pay attention to them and make sure to protect yourself against loss.